Bitcoin Falls Below 200-Day Simple Moving Average to $57K

As an analyst with a background in cryptocurrency markets and experience observing Bitcoin’s price movements, I find the recent drop below the 200-day Simple Moving Average (SMA) concerning. The consistent downward trend of Bitcoin trading below this important indicator suggests that the digital currency may be following a bearish pattern.

In the past 24 hours, Bitcoin‘s (BTC) price has undergone significant volatility, sparking curiosity among investors. At present, the cryptocurrency is valued at $57,534.24, reflecting a 4.3% decrease from its previous value. This represents the third straight day of declining prices for Bitcoin and a drop beneath the 200-day Simple Moving Average (SMA) of $58,691.

Bitcoin Follows Downward Trend

In clear and conversational terms: The 200-day simple moving average (SMA) serves as an effective signal for identifying long-term price trends in both traditional and crypto markets. During European trading hours on Thursday, Bitcoin dipped below its 200-day SMA of $58,492, falling to around $57,300 – a level last seen on May 2, according to TradingView data. When the market consistently trades beneath the 200-day SMA, it’s often considered to be exhibiting a downward trend.

Instead of “In contrast,” you could say “On the other hand,” or “Conversely.” And instead of “those that trade above the average are considered as heading in a bullish direction,” you could say “coins trading above their average price are seen as following a bullish trend.” For example:

Importantly, the U.S. federal fund rate, set by the Federal Reserve, significantly impacts Bitcoin’s price. When interest rates decrease, investors become more drawn to riskier investments such as cryptocurrencies. In their latest meeting, the Fed, headed by Chair Jerome Powell, opted against implementing a rate reduction at this time.

The policymakers aren’t ready to act on further interest rate cuts yet, as they await more information to ensure that inflation is consistently approaching their 2% goal. The upcoming release of the Labor Department’s non-farm payrolls report for June, scheduled for this Friday, could be a crucial piece of data they need to make an informed decision.

BTC Lifeline Hangs on Powell’s Comment

In an email, Valentin Fournier of advisory firm brn expressed his belief that Bitcoin’s price could potentially drop to $52,000. This view was influenced by the harsh remarks made by Jerome Powell and the persistent selling trends in the market.

“Despite this, we advise considering it as a potential purchase. The anticipated enhancements in cryptocurrency regulations and decreasing US inflation rates haven’t been fully reflected in prices yet. Once investors adopt a longer-term perspective, these developments are expected to generate significant momentum.”

Simultaneously, a potential weakening of payroll data for the Labor Market report could lead to a decrease in sell-off expectations. The forecast calls for an increase of 195,000 new jobs added, marking a noticeable decline from the previous month’s figure of 272,000.

As a financial analyst, I’ve come across numerous potential investment opportunities. Yet, among them, the case for Bitcoin as a hedge has piqued my interest, especially considering the views of notable figures like Robert Kiyosaki, Michael Saylor, and even a country such as El Salvador. They advocate that investing in Bitcoin provides the strongest protection against economic uncertainty.

Read More

2024-07-04 19:28